Fiscal 2018 Revenue Up 53%; Q4 Revenue Up 45%;
2018 Operating Income $1.06 million vs. $0.46 million in 2017;
2018 Gross Profit Increased 28% vs. 2017;
2018 Net Earnings $320,000 vs a Net Loss of $301,000 in 2017;
Q4 Net Earnings $114,000;
2018 Cash Flow from Operations $1.315 million
vs $0.357 million in 2017;
Company Pays Down Manatuck Hill Debt by $1.35m in fiscal year;
Sales per placement in food stores increases 35% from prior year.
For Immediate Release
EAST RUTHERFORD, NJ, May 15, 2018 (GLOBE NEWSWIRE) -- MamaMancini's Holdings, Inc. (the "Company" or "MamaMancini's") (OTCQB: MMMB), a marketer of specialty pre-prepared, frozen and refrigerated all-natural food products (as defined by the United States Department of Agriculture), today announced financial results for the fourth quarter and fiscal year 2018, ended January 31, 2018.
Fiscal Year Highlights:
- Fiscal year 2018 revenue increased 53% to $27.5 million compared to fiscal 2017 revenue of $18.0 million.
- Fiscal year 2018 gross margin was 34%, impacted by product mix to larger customers (with resulting lower operating expenses), one-time integration issues, and commodity prices, compared to 40% in 2017.
- Total operating expenses for the fiscal year 2018 increased 21% versus the comparable fiscal 2017. As a percentage of sales, operating expenses decreased to 29.8% of net sales from 37.4% in fiscal 2017.
- Income from operations for fiscal 2018 improved to $1.063 million versus $456,000 in the prior year; an increase of approximately $620,000.
- Placements on grocer's shelves increased at the end of the fiscal 2018 to 43,800, up from 38,700 as of January 31, 2017. Sales per placement per retail food shelf location increased 35% from prior year.
- EBITDA for fiscal 2018 was $1.601 million compared to $ 0.898 million in fiscal 2017.
- Net Income for fiscal year 2018 was $319,740, compared with a net loss of $301,080 in fiscal 2017.
- Net income available to common stockholders for fiscal year 2018 was $228,175 or $0.01 per diluted share, compared to a net loss of $506,001, or $(0.02) per diluted share, in fiscal 2017.
- Cash Flow from Operations was $1,315,240 the year vs. $357,234 for the prior year.
Fourth Quarter Highlights:
- Fourth quarter of fiscal year 2018 revenue increased 45% to $7.8 million compared to $5.4 million in prior year period.
- Gross margin for the fourth quarter was 33%, compared to an estimated 40% for fiscal 2017. The gross margin percentage of sales decrease in this fiscal year was mainly due to a change in product mix to larger accounts which resulted in lower marketing, merchandising, freight, sales commissions, and promotional expenses than smaller accounts. Gross margin is expected to increase as a percentage of sales to 38% in the first quarter of fiscal 2019 due to better cost management and production efficiencies after the integration of Joseph Epstein Foods Enterprises, Inc. (JEFE).
- Net income was $113,591 and net income available to common stockholders was $113,591, or $0.00 per diluted share, during the fourth quarter of fiscal 2018.
- Operating results for the fourth quarter of fiscal 2017 are unaudited and subject to final review and are not included in the fourth quarter comparisons above.
Carl Wolf, Chief Executive Officer of MamaMancini's, commented, "In terms of financial and operating results, we had a very solid year in fiscal 2018. Revenue for the year increased 53% to $27.5 million versus $18 million in fiscal 2017. Income from operations increased significantly on a year-over-year basis to $1.1 million from $0.5 million in the previous fiscal year. Net income available to common shareholders for fiscal 2018 was $228,175, or $0.01 per fully diluted share, compared to a net loss of $506,001, or $(0.02) per fully diluted share, in fiscal 2017. We are pleased with the traction that we are continuing to achieve on our strategic business plan.
While product mix to larger accounts during the year and integration of the Joseph Epstein Foods Enterprises (“JEFE”) acquisition impacted our gross margin, which came in at 34% versus 40% last year, we see this as a temporary impact and expect fiscal 2019 gross margin to be more in line with our historical levels of around 38%. With the JEFE acquisition now fully integrated, we are looking forward to consistent operational efficiencies going forward.”
Mr. Wolf concluded, “As we go through fiscal 2019, we will continue to focus on selling our products into the food service area, on the perimeter of the retail grocery store, where fresh, minimally or non-processed, healthy foods are offered, and where the superior revenue and margin opportunities exist. We will continue to develop new products that will meet the needs of the rapidly growing sector of consumers that seek superior nutritional profiles, with all-natural ingredients and minimal prep time to serve their families. We believe this strategy will enable MamaMancini’s to continue to attract new large national accounts, and to gain a substantial number of new customers around the country.”
The Company’s strategy of developing larger customers and exiting underperforming accounts that do not generate attractive returns has achieved improving operating results. The Company expects some seasonality in sales growth in summer months, but a continuation of significant revenue growth on a yearly basis for the foreseeable future as it continues to develop larger accounts and introduce new product lines. As a result, the company is anticipating fiscal 2019 revenues and operating results to increase significantly over prior year and report continued increased profitability.
Conference Call
The Company has scheduled a conference call for Wednesday, May 16, 2018 at 9:00 a.m. ET, to review the results of fiscal year 2018.
Interested parties may participate on the conference call by dialing (844) 889-4326 or (412) 317-9264. A replay of the conference call will be available by dialing (877) 344-7529 or (412) 317-0088, confirmation code 10119588, through May 23, 2018.
About MamaMancini's
MamaMancini's is a marketer and distributor of a line of beef meatballs and turkey meatballs, all with sauce; five cheese-stuffed beef and turkey meatballs, all with sauce; original beef and turkey meatloaves; chicken parmesan; stuffed peppers; and other similar Italian cuisine products. The Company's sales have been growing on a consistent basis as the Company expands its distribution channel, which includes major retailers and distributors such as Costco, Publix, Shop Rite, Jewel, Sam's Club, Lunds and Byerlys, SuperValu, Safeway, Albertsons, Spartan Nash, Whole Foods Market, Hy-Vee, Shaw's, Kings, Roche Bros., Key Foods, Stop & Shop, Giant, Giant Eagle, Foodtown, Kroger, Shoppers, Schnucks Markets, Fresh Direct, King Kullen, Lowes, Central Market, Weis Markets, Ingles, Food City, The Fresh Market, Market Basket, Meatball Obsession, Monterrey Provisions, Porky Products, Sysco, DPI, United Natural Foods, Bozzutos, Burris Foods, and C&S. The Company sells a variety of its products on air and online on QVC, the world's largest direct-to-consumer marketer.
Forward-Looking Statements
This press release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "may," "future," "plan" or "planned," "will" or "should," "expected," "anticipates," "draft," "eventually" or "projected." You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in the Company's filings with the Securities and Exchange Commission.
Financial Tables to Follow
MamaMancini’s Holdings, Inc.
Consolidated Balance Sheets
| January 31, 2018 | January 31, 2017 | |||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 581,322 | $ | 670,807 | ||||
| Accounts receivable, net | 3,084,715 | 1,817,820 | ||||||
| Inventories | 824,276 | 806,623 | ||||||
| Prepaid expenses | 261,980 | 180,260 | ||||||
| Total current assets | 4,752,293 | 3,475,510 | ||||||
| Property and equipment, net | 2,499,875 | 1,563,381 | ||||||
| Deposits | 20,177 | 20,177 | ||||||
| Total Assets | $ | 7,272,345 | $ | 5,059,068 | ||||
| Liabilities and Stockholders’ Deficit | ||||||||
| Liabilities: | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 3,456,918 | $ | 2,124,880 | ||||
| Line of credit, net | 2,688,764 | 1,363,145 | ||||||
| Term loan | 106,938 | 140,004 | ||||||
| Note payable – net | 1,403,082 | 1,401,906 | ||||||
| Total current liabilities | 7,655,702 | 5,029,935 | ||||||
| Term loan - net of current | 651,677 | 513,328 | ||||||
| Note payable - net of current portion | 250,000 | 1,548,819 | ||||||
| Notes payable - related party | 649,656 | 649,656 | ||||||
| Total long-term liabilities | 1,551,333 | 2,711,803 | ||||||
| Total Liabilities | 9,207,035 | 7,741,728 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ Deficit: | ||||||||
| Series A Preferred stock, $0.00001 par value; 120,000 shares authorized; 23,400 issued as of January 31, 2018 and 2017, 0 and 23,400 shares outstanding as of January 31, 2018 and 2017 | — | — | ||||||
| Preferred stock, $0.00001 par value; 19,880,000 shares authorized; no shares issued and outstanding | — | — | ||||||
| Common stock, $0.00001 par value; 250,000,000 shares authorized; 31,753,437 and 27,810,717 shares issued and outstanding, respectively | 318 | 278 | ||||||
| Additional paid in capital | 16,344,794 | 15,825,029 | ||||||
| Common stock subscribed, $0.00001 par value; 66,667 shares, respectively | 1 | 1 | ||||||
| Accumulated deficit | (18,130,303 | ) | (18,358,478 | ) | ||||
| Less: Treasury stock, 230,000 shares, respectively | (149,500 | ) | (149,500 | ) | ||||
| Total Stockholders’ Deficit | (1,934,690 | ) | (2,682,670 | ) | ||||
| Total Liabilities and Stockholders’ Deficit | $ | 7,272,345 | $ | 5,059,068 | ||||
MamaMancini’s Holdings, Inc.
Consolidated Statements of Operations
| For the Years Ended | ||||||||
| January 31, 2018 | January 31, 2017 | |||||||
| Sales - net of slotting fees and discounts | $ | 27,543,335 | $ | 18,048,792 | ||||
| Cost of sales | 18,282,660 | 10,830,104 | ||||||
| Gross profit | 9,260,675 | 7,218,688 | ||||||
| Operating expenses | ||||||||
| Research and development | 138,000 | 153,296 | ||||||
| General and administrative expenses | 8,059,533 | 6,609,409 | ||||||
| Total operating expenses | 8,197,533 | 6,762,705 | ||||||
| Income from operations | 1,063,142 | 455,983 | ||||||
| Other expenses | ||||||||
| Interest expense | (679,974 | ) | (728,537 | ) | ||||
| Amortization of debt discount | (63,428 | ) | (28,526 | ) | ||||
| Total other expenses | (743,402 | ) | (757,063 | ) | ||||
| Net income (loss) | 319,740 | (301,080 | ) | |||||
| Less: preferred dividends | (91,565 | ) | (204,921 | ) | ||||
| Net income (loss) available to common stockholders | $ | 228,175 | $ | (506,001 | ) | |||
| Net income (loss) per common share - basic and diluted | $ | 0.01 | $ | (0.02 | ) | |||
| Weighted average common shares outstanding | ||||||||
| - basic | 29,811,521 | 27,100,316 | ||||||
| - diluted | 32,205,577 | 27,100,316 | ||||||
MamaMancini’s Holdings, Inc.
Consolidated Statements of Cash Flows
| For the Years Ended | |||||||||
| January 31, 2018 | January 31, 2017 | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||
| Net income (loss) | $ | 319,740 | $ | (301,080 | ) | ||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||
| Depreciation | 538,322 | 441,585 | |||||||
| Amortization of debt discount | 63,428 | 28,526 | |||||||
| Share-based compensation | 428,240 | 598,200 | |||||||
| Changes in operating assets and liabilities: | |||||||||
| (Increase) Decrease in: | |||||||||
| Accounts receivable | (1,266,895 | ) | (341,238 | ) | |||||
| Inventories | (17,653 | ) | (248,871 | ) | |||||
| Prepaid expenses | (81,720 | ) | 29,093 | ||||||
| Increase (Decrease) in: | |||||||||
| Accounts payable and accrued expenses | 1,332,038 | 151,019 | |||||||
| Net Cash Provided by (Used in) Operating Activities | 1,315,500 | 357,234 | |||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||
| Cash paid for fixed assets | (1,474,816 | ) | (552,869 | ) | |||||
| Net Cash Used in Investing Activities | (1,474,816 | ) | (552,869 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||
| Repayment of note payable – related party | - | (7,344 | ) | ||||||
| Repayment of note payable | (1,350,000 | ) | (486,279 | ) | |||||
| Debt issuance costs | (24,697 | ) | (50,000 | ) | |||||
| Borrowings (repayments) of line of credit, net | 1,339,245 | 403,524 | |||||||
| Borrowings from term loan | 251,671 | 340,000 | |||||||
| Repayment of term loan | (146,388 | ) | (126,668 | ) | |||||
| Net Cash Provided by Financing Activities | 69,831 | 73,233 | |||||||
| Net Decrease in Cash | (89,485 | ) | (122,402 | ) | |||||
| Cash - Beginning of Period | 670,807 | 793,209 | |||||||
| Cash - End of Period | $ | 581,322 | $ | 670,807 | |||||
| SUPPLEMENTARY CASH FLOW INFORMATION: | |||||||||
| Cash Paid During the Period for: | |||||||||
| Income taxes | $ | - | $ | - | |||||
| Interest | $ | 464,958 | $ | 721,821 | |||||
| SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||||||||
| Stock issued for Series A Preferred dividends | $ | 91,565 | $ | 271,914 | |||||
| Debt issuance costs included in principal balance of note | $ | 89,104 | $ | 358,523 | |||||